Health Care Finance:
Basic Tools for Nonfinancial Managers

Preface

Acknowledgments

PART I—HEALTH CARE FINANCE OVERVIEW

Chapter 1— Background

• Progress Notes

• The History

• The Concept

• Viewpoints

Chapter 2— Introduction to Health Care Finance

• Progress Notes

• Why Manage?

• The Elements of Financial Management

• The Organization’s Structure

• Two Types of Accounting

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 3— What Does the Health Care Manager Need To Know?

• Progress Notes

• How the System Works in Health Care

• The Information Flow

• Basic System Elements

• The Annual Management Cycle

• Information Checkpoint

• Key Terms

• Discussion Questions

PART II—MANAGERIAL ACCOUNTING AND FINANCIAL ANALYSIS

Chapter 4— Revenues (Inflow)

• Progress Notes

• Overview

• Receiving Revenue for Services

• Sources of Health Care Revenue

• Grouping Revenue for Planning and Control

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 5— Expenses (Outflow)

• Progress Notes

• Overview

• Disbursements for Services

• Grouping Expenses for Planning and Control

• Cost Reports as Influencers of Expense Formats

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 6— Cost Classifications

• Progress Notes

• Distinction between Direct and Indirect Costs

• Examples of Direct Cost and Indirect Cost

• Responsibility Centers

• Distinction between Product and Period Costs

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 7— Cost Behavior and Break-Even Analysis

• Progress Notes

• Distinction between Fixed, Variable, and Semivariable Costs

• Examples of Variable and Fixed Costs

• Analyzing Mixed Costs

• Contribution Margin, CVP and PV Ratios

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 8— Staffing: The Manager’s Responsibility

• Progress Notes

• Staffing Requirements

• FTEs for Annualizing Positions

• Number of Employees Required To Fill a Position: Another Way to Calculate FTEs

• Tying Cost to Staffing

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 9— Comparative Data and Forecasts

• Progress Notes

• Comparative Data

• Forecasts

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 10— Budgeting and Variance Analysis

• Progress Notes

• Budgets

• Variance Analysis

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 11— The Time Value of Money

• Progress Notes

• Purpose

• Unadjusted Rate of Return

• Present-Value Analysis

• Internal Rate of Return

• Payback Period

• Evaluations

• Information Checkpoint

• Key Terms

• Discussion Questions

• Appendix 11–A

• Appendix 11–B

PART III—FINANCIAL MANAGEMENT TOOLS

Chapter 12— Reporting

• Progress Notes

• Understanding the Major Reports

• Balance Sheet

• Statement of Revenue and Expense

• Statement of Changes in Fund Balance/Net Worth

• Statement of Cash Flows

• Subsidiary Reports

• Summary

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 13— Financial and Operating Ratios as Performance Measures

• Progress Notes

• The Importance of Ratios

• Liquidity Ratios

• Solvency Ratios

• Profitability Ratios

• Information Checkpoint

• Key Terms

• Discussion Questions

Chapter 14— Other Types of Performance Measures

• Progress Notes

• Importance of a Variety of Performance Measures

• Adjusted Performance Measures over Time

• Benchmarking

• Economic Measures

• Measurement Tools

• Information Checkpoint

• Key Terms

• Discussion Questions

PART IV—CASE STUDY

Chapter 15— Case Study: Metropolis Health System

• Background

• Meeting the Challenge of Cost Containment: A Case StudyUsing Variance Analysis

PART V—MINI-CASE STUDIES

Chapter 16— Mini-Case Study 1: Using Financial Ratios and Interpreting Credit Analysis in Hospitals and Nursing Homes

• Hospital Finance

• Credit Analysis of a Skilled Nursing Facility

• Credit Analysis of Nonprofit Continuing Care Retirement Communities

Chapter 17— Mini-Case Study 2: Changing Economic Realities in the Health Care Setting: A Physician’s Office Teaching Case That Includes Specifics on Changing Payment Levels

• Improving Patient Care in a Changing Environment: A Teaching Case

• RBRVS—1999 Update

Chapter 18— Mini-Case Study 3: The Economic Significance of Resource Misallocation: A Finance and Operations Problem in theWomen, Infants, and Children Public Health Program

• Client Flow through the Women, Infants, and Children Public Health Program

• Appendix A: Checklists

• Appendix B: Web-Based Learning Tools

Notes

Glossary

Examples and Exercises, Supplemental Material, and Solutions

Index